U.S. Government Drops Anti-Money Laundering Provisions from Defense Act
Summary:
The US government has removed two key elements meant to counter money laundering in the field of cryptocurrency from the National Defense Authorization Act (NDAA). These provisions involved a comprehensive review system for financial institutions and reporting of cryptocurrency activities. These crypto-related adjustments incorporated elements from the 2022 Digital Asset Anti-Money Laundering Act and the Responsible Financial Innovation Act. The objective behind these changes includes preventing incidents of illicit activities in the sector and promoting responsible financial innovation.
The U.S. government has rescinded two elements of the National Defense Authorization Act (NDAA) intended to counteract money laundering issues tied to cryptocurrency. The NDAA is legislation that dictates how federal funds can be allocated by the nation's defense department. The two abolished provisions encompassed a full-scale review framework and the reporting of cryptocurrency activities to combat illegal operations.
The first rescinded provision demanded that the U.S. Treasury Secretary collaborate with banking and government regulators to establish a risk-oriented inspection and review framework centering on cryptocurrencies at financial institutions.
The second rescinded provision aimed to challenge undisclosed crypto asset operations, like those linked to crypto mixers and tumblers. This necessitated crafting a report outlining the amounts of crypto asset transactions associated with sanctioned entities, and the regulatory tactics embraced by other jurisdictions. Following that, advice would be offered on executing crypto regulations to the U.S. government.
On July 28, as reported by Cointelegraph, the U.S. Senate approved the NDAA valued at $886 billion. The crypto-related modifications embodied components from the Digital Asset Anti-Money Laundering Act, enacted in 2022, and the Responsible Financial Innovation Act, which aspires to establish safeguards to prevent another incident similar to that of FTX in the industry.
The legislation was proposed by a team of senators, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall.
In recent times, the U.S. government has been reflecting on topics concerning money laundering and terrorist funding aided through cryptocurrency. The Financial Services Committee of the U.S. House of Representatives convened a meeting on November 15 to deliberate on illicit activities within the crypto ecosystem.
During the meeting, they also evaluated how proactive cryptocurrency exchanges and decentralized finance providers are in obstructing money laundering and terrorist financing.
Published At
12/10/2023 4:54:56 AM
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